SBD/February 4, 2011/Franchises

Golisano's Sale Of Sabres To Pegula Includes Provision That Team Cannot Move

Golisano says he turned down higher offer because Sabres would have been moved
Sabres Owner Tom Golisano Thursday officially announced the sale of the team to East Resources President & CEO Terry Pegula, and the agreement includes the NLL Buffalo Bandits and the "right to manage" HSBC Arena, as well as a provision that the Sabres "cannot be moved out of Buffalo," according to Mike Harrington of the BUFFALO NEWS. Golisano said that he "turned down an offer that was $70 million higher than Pegula's because it required that the team be moved." Golisano "would not confirm or deny that bid was made by" RIM co-CEO Jim Balsillie, although most NHL observers "assume that to be the case." Golisano purchased the Sabres from the NHL in '03 for $92M, "minus $30 million of forgiven debt." Along with Managing Partner Larry Quinn and COO Dan DiPofi, Golisano "cashed out Thursday" for $189M. The sale is "expected to be rubber-stamped" by the NHL BOG as well as the Department of Justice, which "charges a $100,000 fee to approve large-scale transactions to assure there are no monopolies." Quinn said that he "expects Pegula to be in charge before Feb. 28, the last day NHL teams are allowed to trade players." Golisano said that "in the next 15 days, he will announce he's becoming a major part of a new venture of a national scope that is 'not political but governmental.'" Quinn also is "moving on to other pursuits while the sale is completed while DiPofi is staying in an unspecified role through the 2011-12 season." Meanwhile, Golisano Thursday "spoke publicly for the first time about possibly owning the Buffalo Bills in the post-Ralph Wilson era." The "message was clear: Golisano bought the Sabres in 2003 to prevent them from skipping town -- and he would certainly be interested in doing the same for the Bills if it looked like they were packing up." Golisano: "I think the key issue would be the level of concern I would have about them leaving the community. And the higher the concern, the more interest I probably would have" (BUFFALO NEWS, 2/4).

TURNING THE TEAM AROUND: Golisano said that the Sabres "lost a total of $20 million in his first two years of ownership," but by "rejuvenating a hockey market with back-to-back runs to the Stanley Cup Eastern Conference finals, and from revenue generated from broadcasting, sponsorships and a busy arena, the operation became a money maker." In Rochester, Kevin Oklobzija wrote Golisano was "clearly a corporate type who grew to like hockey in his seven years as owner," but he "just liked money more." Oklobzija: "Considering the Sabres very likely wouldn't be in Buffalo now had he not ventured down the Thruway to save them, that's OK" (, 2/3). Oklobzija notes fans and Buffalo media "criticized Golisano for being an absentee owner who looked at the bottom line before the winning percentage." But while he "admitted his orders to Quinn, DiPofi and general manager Darcy Regier were simple -- 'We have to at least break even,' he said -- he bristled at characterizations that he didn't care." Golisano: "I don't think anything could be farther from the truth" (Rochester DEMOCRAT & CHRONICLE, 2/4). In Buffalo, John Vogl writes the Sabres organization "leaves Golisano's hands in better shape than it entered them, at least as far as off-ice matters are concerned." The Sabres were a "bankrupt mess when Golisano took control in March 2003." The season-ticket base was "virtually non-existent, HSBC Arena seats were empty and the team had been battered by a 10-month barrage of questions about bankruptcy and relocation" (BUFFALO NEWS, 2/4).

TIME TO HIT THE GROUND RUNNING: THE HOCKEY NEWS' Adam Proteau wrote, "Golisano owned the team, but wasn't driven enough by the love of the sport or a natural competitiveness to keep up with the NHL's elite franchises. And while it's within any owner's right not to lose his or her shirt on a sports team, I'm tired of seeing the poor people of Buffalo have to hear about having their team 'run like a business.'" If Pegula is "serious about succeeding in the NHL," he "cannot be bound by the Sabres' small-market status." He "has to work with the league, its revenue-sharing program and, ultimately, his own ego to bankroll the organization the way the best of them do, not just on the ice, but off of it as well" (, 2/3). The Boston Globe's Kevin Paul Dupont said Pegula is buying the Sabres "as really a civic piece." Dupont: "I think they're going to spend to the cap. They're going to be very aggressive. They want their thumbprint on this early, they want it on there often, and I think they're looking for a whole new day here." Dupont added if you "look for a prototype right now, what's going on down in Tampa with new Lightning Owner Jeff Vinik announcing $35M going into the stadium and $10M going to charity" ("NHL Overtime," Versus, 2/2). In Buffalo, Bucky Gleason writes Pegula is "certain to energize the fan base and restore hope as an owner who cares about winning" (BUFFALO NEWS, 2/4).
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